Can one pledge or lien or hypothecate the bond, while obtaining a loan from a scheduled commercial bank?
Yes, one may pledge or lien or hypothecate the bond, while obtaining a loan from a scheduled commercial bank. However, this can be done once the said lock-in period is over. TAXATION OF LONG-TERM INFRASTRUCTURE BONDS: Your investment in these “long-term infrastructure bonds” will be eligible for a deduction under section 80CCF of the Income Tax Act, 1961 subject to a maximum limit of 20,000. This deduction limit of 20,000 will be over and above 1,00,000 benefit available under section 80C, 80CCC and 80CCD. However, the interest earned by you on the investments (in these bonds), will be taxed (they would be included in the “Income from Other Sources”, in the financial year in which it is received). However, since these bonds are compulsorily issued in a demat mode and listed on the exchange, no Tax Deduction at Source (TDS) will be done on the interest received. OUR VIEW: In our opinion investments in IDFC’s long-term infrastructure bonds, appears enticing only from a tax planning persp
